For those of you who have been keeping up with the Elizabeth Holmes/Theranos trial, you likely have seen that there was a very mixed verdict. Holmes was convicted on some counts, acquitted on some and the jury was deadlocked on others. From a reader’s perspective, it can be confusing to understand how such a mix of a verdict could happen.
In one of the many criminal trials I had as an OIG agent (I had about 9 trials on my career) I had a particular kickback case where the jury rendered what the prosecutors characterized as a “compromised” verdict. By this, it meant that the jurors agreed to convict on a particular count, while persuading their fellow jurors to agree to find the defendant not guilty-essentially playing off of what I would describe as individual sympathies.
In my particular case, it was very odd; 2 counts of violating the anti-kickback statute and the facts for each count were nearly identical. We had 2 kickback payments made a month apart. The cooperating witness did almost the exact same thing when making the payment on covert audio and video. This was done intentionally to show the pattern, and to make it easier to understand for prosecution purposes. With that, why guilty of one but not the other? Only the jurors will know that.
Now, returning to the Holmes trial, I followed it daily, kept up with numerous podcasts on what was happening in the courtroom, and read everything I could about the alleged (and now, at least partial, confirmation of the scheme). I am amazed that the jury did not convict on all counts, but again, I am on the sidelines and am only making my assessment based on reporting.
Split verdicts do not necessarily provide relief to the defendant when it comes to sentencing. Holmes prison term will still be driven by the advisory US Sentencing Guidelines. I’ve blogged numerous times about the Guidelines and their implications on sentencing. Being convicted of 1 or more counts can have a minimal impact if the charge carries a substantial term of imprisonment.
It will be inordinately important that the judge sentence her to address general deterrence over specific deterrence. It is clear she will not be a recidivist. The bigger issue will be if the sentence sends a message to other corporate heads that fraud is not tolerated. Equally interesting will be if her codefendant, who is currently awaiting trial, will continue on that path or seek a plea agreement in light of even the partial verdict.
By Eric Rubenstein, MS, CFE
Director, Litigation, FWA @ Advize